Behind gambling, reading, and television, the global video gaming industry has surpassed Hollywood to become the world’s fourth-biggest source of entertainment business.
According to a recent analysis by games business research firm NewZoo, the worldwide video game market was worth $91.5 billion in 2015, with forecasts of $107 billion in 2017.
The data reflect a tight race between the Chinese and US gaming sectors, with the latter slightly losing out at $22 billion compared to China’s $22.2 billion. The European market is worth $20.5 billion, including Africa’s part.
PC gaming still reigns supreme in the ever-present ‘platform wars,’ accounting for $33.7 billion of the worldwide industry. Web-based “casual” gaming, in particular, accounts for approximately $6.6 billion.
The worldwide market for TV and console gaming, which includes the emerging virtual reality (VR) category, is predicted to be $25.1 billion, followed by smartphone gaming, which is expected to be $20.6 billion. Portable gaming (tablets and handheld consoles) is the lowest segment of the market, accounting for $12.1 billion.
According to data provided by another research organization, SuperData, e-sports and game video content contribute a total of $2.1 billion to the worldwide gaming sector, with virtual reality accounting for $225 million.
The expansion of video gaming is accompanied by a significant drop in other entertainment industries, particularly the performance of Hollywood and other movie studios.
The Movie Industry
According to figures from business research company IBISWorld, the worldwide movie production and distribution sector was valued $126.8 billion in 2012. By 2014, the figure had dropped to $90 billion, with the industry expected to drop even more to $89 billion in 2015. The persistent fall, according to IBISWorld, is attributable to a variety of causes, including low levels of disposable income in key countries and the availability of material online.
“Newly industrialized countries like Brazil, Russia, India, and China are rapidly expanding and are projected to sustain industry revenue increase,” the association stated. “However, the widespread availability of free movies on the internet presents a challenge to the sector.”
The music industry is in a downturn
Other entertainment industries have also declined, such as music production and distribution, which is expected to bring in just $15 billion in 2015, down from $28 billion in 2014.
According to IBISWorld, the loss is due to major corporations’ persistent inability “to utilize a crop of possible new income sources to compensate for the significant reduction in physical record sales over the last five years.”
“Unfortunately, industry income is likely to continue to decline in the five years leading up to 2020, and music organizations’ success during this time will be determined by their ability to adopt new technologies.”
Subscriptions to television
According to PwC’s entertainment sector tracker, TV subscriptions and licensing will continue to expand through 2018, with a value of close to $300 billion.
The worldwide industry is expected to reach $250 billion in 2015. In 2018, global subscription TV sales will rise at a CAGR of 3.5 percent to US$236 billion (excluding licensing).
“This rise suggests that subscription TV is in good shape, aided by the steps it has put in place to combat the effect of OTT and other disruptive pressures,” according to PwC.
Casinos and gambling on the internet
Similarly, the worldwide casino and internet gambling industry is expanding, with revenue almost doubling since 2014, when the business was estimated to be worth $140 billion. IBISWorld puts its overall worth at $285 billion in 2015.
“As additional casinos open in China and other Asian nations, strong growth will continue.” “As established markets mature and have less potential for revenue development, new markets will emerge, expanding access to gaming activities,” the organization said.
Digital publishing and books
The publishing industry has shrunk marginally in value during 2014, to $103 billion (from $108 billion in 2014), but there is still plenty of space for development because of the expansion of digital technologies and publishing. According to IBISWorld, the publishing industry has been plagued by uncertainty, but a shift toward digital technologies, such as e-books, has resulted in a rapidly expanding area.
“However, e-books are difficult to price, posing an interesting challenge for the market,” the report said. “In the future years, rising disposable income and literacy will promote industry expansion, while increased Internet usage will assist book sales and the convenience of e-books will extend the entire book market,” says the report.